Key Points
- The British Pound surged higher this week vs the US Dollar, and traded as high as 1.4740.
- The GBPUSD pair is about to break a major support trend line on the hourly chart.
- The UK Gross Domestic Product released by the National Statistics posted a rise of 2% in Q1 2016, which was less than the forecast of 2.1%.
- UK Total Business Investment declined by 0.4%, more than the forecast of -0.1%.
Technical Analysis
The British Pound bulls have been aggressive recently, as they took it higher vs the US dollar towards the 1.4750 level. However, the stated level acted as a resistance and pushed the GBPUSD pair down.
It looks like the GBPUSD pair is about to break a major support trend line on the hourly chart, which may ignite more losses in the near term.
A break of the trend line support may take the pair towards the next support in the form of the 50 hourly simple moving average.
UK GDP
Today in the UK, the Gross Domestic Product was released by the National Statistics. The forecast was slated for a rise of 2.1% in the total value of all goods and services produced by the UK in Q1 2016, compared with the same quarter a year ago.
The outcome was disappointing, as the UK increased by 2%. The report added that “UK GDP in volume terms was estimated to have increased by 0.4% between Quarter 4 (Oct to Dec) 2015 and Quarter 1 (Jan to Mar) 2016, unrevised from the preliminary estimate of GDP published on 27 April 2016. This is the 13th consecutive quarter of positive growth since Quarter 1 2013”.
Overall, the GBPUSD pair came under a bearish pressure after the release, and may trade down in the near term.
